Douglas-fir shipments by type of movement, years 1954 and 1948 Source: West Coast Lumberman's Association, Portland, Oreg.; Southern Pine Association, statistical department, New Orleans, La., Mar. 10. 1955. EXHIBIT 11 Indexes of wholesale prices, by groups and subgroups of commodities, 1947 to Chairman BARDEN. Mr. Elliott? Mr. ELLIOTT. No questions. Chairman BARDEN. Mr. Landrum? Mr. LANDRUM. Mr. DeWeese, how large is your own operation? Mr. DEWEESE. We ship about 22 million feet of lumber a year and employ 160 people directly and 190 through contractors and subcontractors, a total working force of 350. That used to be called a small operation even in the South, but I think it would now come under the category of medium-large. Mr. LANDRUM. Are these 160 whom you employ directly permanently on your payroll? Mr. DEWEESE. Yes, sir. Mr. LANDRUM. That is, insofar as they are able to meet your requirements? Mr. DEWEESE. Yes, sir. Mr. LANDRUM. You furnish employment directly, then, in your own community, your base of operations, to 160 people? Mr. DEWEESE. These other people are in the same general community, the other 190 are. Mr. LANDRUM. You have 350? Mr. DEWEESE. Who are earning wages. Mr. LANDRUM. To which your business furnishes employment? Mr. DEWEESE. Yes, sir. Mr. LANDRUM. What is the average wage rate in your own business? Mr. DEWEESE. Between 96 and 97 cents an hour. That is, the average earnings for the week of the hourly rated employees would run that. That includes some overtime. Mr. LANDRUM. It includes skilled and unskilled? Mr. DEWEESE. Yes, sir; up to the hourly rated skilled men. Some of them have weekly pay. Mr. LANDRUM. What are the average hourly wages that you pay to the skilled workers? Mr. DEWEESE. I believe about $1.15 or $1.20. And after that we are on a weekly salary. Mr. LANDRUM. You say you ship 22 million feet, approximately, a year? Mr. DEWEESE. Yes, sir. Mr. LANDRUM. Suppose this Congress goes ahead and enacts a minimum wage requiring you to pay 90 cents in your business, a 90cent minimum. What would happen to your own personal operation? Mr. DEWEESE. My personal operation has an 80-cent minimum and we have had for several years. Mr. LANDRUM. No one working for you receives less than 80 cents an hour? Mr. DEWEESE. No, sir. And our profit in the last 2 years in 2 good business years, too, if I may say so-was $1.98 before income taxes per thousand. A raise to 90 cents would give us a 122 percent increase. Mr. LANDRUM. What would that do to your profit of $1.98? Mr. DEWEESE. At 122 percent, well, I have my labor costs here, which are considerably below the average for the industry. Ours are $26.61, total labor. You take 121⁄2 percent of $26.61. That would be $3.37. It would increase our direct labor cost. Our profit in the last 2 years was $1.98 before income taxes. Mr. LANDRUM. That $1.98 profit, all expenses were paid except your income tax? Mr. DEWEESE. Yes. Mr. LANDRUM. After you paid your taxes, that is a net figure. What is left is net. Mr. DEWEESE. That $1.98-no, sir, that is before any income taxes. Mr. LANDRUM. After you have paid your taxes, what is left is net. Mr. DEWEESE. Well, roughly, that would run for Mr. LANDRUM. You misunderstand my question. I do not mean to be that curious about your own personal operation. After you have paid your income taxes, or all taxes out of your $1.98 profit, what is left of that figure was net profit; is that right? Mr. DEWEESE. Right. Mr. LANDRUM. So you had no other expenses to pay? Mr. DEWEESE. That is right. Mr. LANDRUM. So that if you are required to go to a minimum of 90 cents per hour it would mean a 122 percent increase to you, and what would become of that $1.98 figure? Mr. DEWEESE. That is a good question. That is the one I have been worrying about myself. But because of the conditions in our industry that we have tried to cover here and I have been in it all my life-I have no way in the world to justify any belief that we are going to get any more for our lumber whether our labor costs go up $2 or $5. It just does not work that way in our industry. Mr. LANDRUM. Wait just a minute, there. Do you buy your timber from the farmer? Mr. DEWEESE. Most all of it, yes. Mr. LANDRUM. The small landowners. You could reduce the stumpage price you pay him, could you not, and keep that figure? Mr. DEWEESE. Theoretically. That is a big question we don't know about. But we are going to try if we have to. We hope we don't have to. Mr. LANDRUM. I want to get back to this $1.98. If you are required to increase your labor cost 122 percent, your profit figure is going down a corresponding amount. Suppose you are required to raise it to $1 an hour. What increase would that be? Mr. DEWEESE. Of course, I think our operation is a little more efficient than most of the industry, Mr. Landrum. But it would be 25 percent of this $26.61. That would be $6.65 per thousand at $1 minimum. Mr. LANDRUM. Could you stay in business at $1? Mr. DEWEESE. It is my personal opinion that my company cannot. We have a 58-year-old firm that we are mighty proud of. We think it is a good institution. Mr. LANDRUM. Do you mean by that, that you would, if you were required to pay such a minimum as we are talking about here, quit this prosperous business you are in? Mr. DEWEESE. I can see no other course for us at the present with $1 wage. Mr. LANDRUM. You do not look like a man who would want to quit in the face of a fight. As a matter of fact, you appear to me to be a man that would rather have a fight and who is capable of carrying on a pretty good one, at that. Mr. DEWEESE. I don't mind fighting, but I can't lose money very long. Mr. LANDRUM. In short, then, a raise to 90 cents or a dollar would threaten the employment of 350 people in Philadelphia, Miss.? Mr. DEWEESE. Yes, sir. But I am, of course, trying to speak for 250,000 here that we think would be affected, most of them. Mr. LANDRUM. I have a very simple, one-track mind that too many people are finding out about too quickly. I want to keep it down on a level that I can understand, myself. Now, are there in Philadelphia, Miss., or in the surrounding towns and communities, industries which could absorb these 350 people if you are required to, or decide that, you no longer want to battle with the minimum wage? Mr. DEWEESE. Absolutely not, Mr. Congressman. I happen to be president of our chamber of commerce and I spent over half of my time in the last 2 months working on industrial prospects trying to get somebody to come in there and employ labor, and pay a lot higher wages than I pay and put me out of business if they can. I do not like the idea of being put out this other way. Mr. LANDRUM. Do you have a surplus of labor already? Mr. LANDRUM. Mr. DeWeese, I want to compliment you for the statement you have made. I am, of course, like all men, whether we are in public life or private life, we want people to earn as much money as possible. We believe the more money they have, the stronger their purchasing power. Mr. DEWEESE. We want them to have it from a humane standpoint, Mr. Congressman. And my company is giving bonuses every year, or has except two when we could not afford it. And we went above the minimum as soon as we could afford it after it was raised in 1950 and the Korean war brought on this inflation and warborne prosperity that enabled us to rise. We want them to have it, too. Mr. LANDRUM. Did that bonus reach into all of your employees? Mr. DEWEESE. Yes. Mr. ELLIOTT. Will the gentleman yield? Mr. LANDRUM. Yes. Mr. ELLIOTT. Does the 80-cent minimum statement you made include your bonuses that you paid? Mr. DEWEESE. No, sir. Mr. ELLIOTT. If you add your bonuses, what would your minimum be? Mr. DEWEESE. The employees who had been there 10 years and up got 5 cents an hour, and others 3 cents for the year. Mr. ELLIOTT. In other words, that would raise your minimum, then, to about 83, if you include the bonus, would it not? Mr. DEWEESE. Yes, sir, in my particular company. Mr. ELLIOTT. Thank you. Chairman BARDEN. Would the gentleman yield for just a minute? Mr. LANDRUM. Yes. Chairman BARDEN. Did I understand you to say that last year you made $1.92? Mr. DEWEESE. $1.98 before income taxes. Chairman BARDEN. I believe you say a dollar minimum will absorb the $1.98 and show a loss of $3.35 per thousand feet. |